The Cayman Islands Monetary Authority recently entered into a consultation process with industry regarding a new corporate governance regime. Captive International spoke with Rob Leadbetter, chairman of the Insurance Managers Association of Cayman about its implications for the captive sector there.
Do you expect that the captive sector will have much say in the consultation process? What is being done to get its voice heard?
The Cayman Islands Monetary Authority (CIMA) is governed by the Monetary Authority Law (MAL) which states that public consultation is required for any amendment to rules or statements in principles or guidance. CIMA has honoured this requirement and is collecting feedback from the industry. The public consultation announcement has been issued to the media, to industry associations to disseminate amongst their members, and IMAC has also posted this on its website at www.caymancaptive.ky. The individual insurance managers are working with their clients to get feedback and will submit those comments back to CIMA. One of the main reasons for the Cayman Islands success as a financial services centre is because of the close cooperation between industry and the regulator and this is one more example of this exceptional level of engagement and cooperation for the betterment of the financial services industry here.
What are the implications of greater corporate governance and transparency for Cayman as a captive domicile?
The Cayman Islands has been fully supportive of transparency initiatives and exceptional corporate governance in the past – complying with every international regulatory initiative based on a level playing field in the last two decades. Although we still struggle with populist views counter to this, Cayman well understands that appropriate regulation, transparency and international cooperation are key drivers to commercial success, not an impediment to it. The fact that the regulator is looking to formalise best practices is seen as welcomed by the industry.
What are the potential cost implications of greater governance and transparency for the captive sector?
CIMA is proposing that there will be no hard costs incurred in this process, as they already have the IT and human infrastructure to be able to handle the database and fit and proper testing. Any residual costs are anticipated to be covered by charging either annual fees or one-at-a-time fees for searching the database.
Are the moves viewed in a positive light by the sector?
The industry has been overwhelmingly supportive on this initiative. The proposal was actually led by the alternative investment industry, which recognised early on that Cayman had a significant opportunity to once again be a standard-setter in the adaptation and implementation of programmes designed to halt any kind of criminal or negligent activity. This proposal has been a few years in development and it is welcomed as a step in the right direction.
Cayman, CIMA, corporate governance